Home > Taxes > A few obvious special interest business tax extenders passed

A few obvious special interest business tax extenders passed

January 4, 2013

Pig_01_Face_Cartoon_PinkToday I had to undertake further research on the American Taxpayer Relief Act of 2012.  I’ve posted some links and notes about Title III: Business Tax Extenders on the TN Tax Accounting Blog. There are 31 extenders included in Title III of the American Taxpayer Relief Act. Looking through the list there are a few obvious tax extenders that are special interest driven.

Here are some of the extenders that are obviously special interest driven:

  • Sec. 306. Extension of railroad track maintenance credit.

    • Really? We need to subsidize that poor rail industry? This extends the 50% tax credit for railroad track related maintenance.
    • Taxpayer Cost = $331 million
  • Sec. 307. Extension of mine rescue team training credit.
  • Sec. 316. Extension of election to expense mine safety equipment.
    • And subsidies for the poor mining industry! I’m all for safety, but that is a cost of doing business. Special tax credits are not needed for each industry, no matter how strong their union presence is.
  • Sec. 317. Extension of special expensing rules for certain film and television productions.
    • It’s hard to see why subsidies are required for Hollywood. They only brought in an estimated $10.59 billion in ticket sale revenue for 2012. And that’s in theater ticket sales alone!
  • Sec. 318. Extension of deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
  • Sec. 329. Extension of temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands.
    • Ah, we go from a country that tried alcohol prohibition less than a century ago to subsidizing it. Well subsidizing it if it comes from Puerto Rico or the Virgin Islands anyhow.
    • Taxpayer Cost = $450 million per year

There are more in this list of 31. However this is enough listed to make the point. There is too much pork in this fiscal cliff deal!

Don’t get me wrong. Anytime I see taxes go down I am happy. However these are not cases of taxes going down to help business owners. This is corporatism at its worst. Special interests lobby DC with millions of dollars to get these tax breaks for their specific industry. If Washington really cared about helping business owners they would either end all Corporate Taxes or make the same cuts for all businesses!

The corporate tax rate in the United States is 40%. That 40% takes away from business expansion, research, employee development,  and even return on investment for shareholders. This would be the time for Congress to get serious about simplifying the tax code. If people cared about removing “loopholes” they would support removing exemptions and creating a simpler tax system that doesn’t choose market winners and losers. These “loopholes” often mentioned are anything but accidental; they are created by special interests for congress to pass.

Instead of blaming ‘evil capitalists’ for the down economy people need to look at DC. DC has been promoting a corporatism that is slowly destroying our economy.

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